India
becomes first South Asian country to get access to America's cutting-edge
technology

What
in news:

ØThe US had recognized India as a major defense partner - a move
which paved the way for country's STA-1 status.

Ø Both the countries had reached an understanding under which
India would receive license-free access to a wide range of dual-use
technologies.

Context:

ØThe United States designated India as a Strategic Trade
Authorization-1 (STA-1) country - a status that will allow the country to buy
highly advanced and sensitive technologies from America.

Ø With such coveted designation, India will now be at par with the
United States' closest allies and partners such as NATO.

ØIn a statement, US Commerce Secretary Wilbur Ross said that this
new designation reflects India's membership in three of the four multilateral
export control regimes, as well the development of its national export control
system.

Ø"US companies will be able to more efficiently export a much
wider range of products to Indian high technology and military customers.

Ø India's new status will benefit US manufacturers while
continuing to protect its national security.

ØSTA Tier 1 treatment will expand the scope of exports subject to
the Export Administration Regulations (EAR) that can be made to India without
individual licenses.

Ø This regulatory change will enhance the bilateral defense trade
relationship and result in a greater volume of US exports to India.

ØCurrently there are 36 countries on STA-1 list. India is the only
South Asian country to be on the list.

Ø Other Asian countries designated as STA-1 are Japan and South
Korea.

ØSTA-1 provides India greater supply chain efficiency, both for defense
and for other high-tech products, that will increase activity with US systems,
the interoperability of the systems, and will reduce time and resources needed
to get licensing approved.

ØBoth the countries had reached an understanding under which India
would receive license-free access to a wide range of dual-use technologies in
conjunction with steps that India has committed to take to advance its export
control objectives.

ØSTA-1 designation authorizes the export, re-export and transfer
(in-country) of specified items on the Commerce Control List to destinations
posing a low risk of unauthorized or impermissible uses.

License
Exception Strategic Trade Authorization (STA)

ØA part of the ongoing Export Control Reform is the license
exception Strategic Trade Authorization (STA).

ØThis type of U.S. Government authorization allows a controlled
item to be exported under defined conditions without a transaction-specific
license.

ØThe defined conditions for any license exception allow for an
audit trail to ensure the U.S.

ØGovernment’s ability to enforce the controls. Eligibility to ship
under a license exception is not a de-control.

ØThe STA permits the export of a defined set of items on the
Commerce Control List to Allies and certain other friendly countries without a
specific license.

Ø These items include certain dual-use items and certain less
significant munitions items, predominantly parts and components. The STA
Imposes enhanced compliance requirements by requiring foreign importers to
certify in advance of receipt of STA-eligible items that they will abide by
U.S. export control regulations, including the need to obtain a U.S. license to
export or re-export outside of STA-eligible countries.

License Exception STA Decision Tool

ØThe U.S. Department of Commerce, Bureau of Industry and Security
(BIS) offers a tool to users of License Exception STA to help them determine if
they are eligible to use and will be in compliance with License Exception STA.

ØThis tool serves as a checklist to identify and verify the key
eligibility and compliance requirements of the license exception.

ØThe STA exception is only relevant to exports, reexports, and
transfers for which a license is required under the EAR.

ØThus, if the EAR does not impose an obligation to apply for and
receive a license before exporting, reexporting, or transferring an item
subject to the EAR, STA is not relevant to the transaction and this tool is not
relevant to you.

Expected
prelims question:

Consider the following statements

1.The
United States designated India as a Strategic Trade Authorization-1 (STA-1)
country

2.The
STA permits the export of a defined set of items on the Commerce Control List
to Allies and certain other friendly countries without a specific license

Which of the given statements
are/is correct?

a)Only
1

b)Only
2

c)Both
1 and 2

d)None
of above

Ans - c

Expected
mains question:

What do you mean by License Exception Strategic Trade
Authorization (STA).critically analyse the reasons whyUnited
States designated India as a Strategic Trade Authorization-1 (STA-1) country